Statement of Cashflow

Question 1

Sale of inventory (operating activity)

Answer 1

Dr. Accounts Receivable
Cr. Sales Revenue
Dr. Cost of Goods Sold
Cr. Inventory

Question 2

Purchase of equipment (investing activity)

Answer 2

Dr. Equipment
Cr. Cash

Question 3

Issuance of common stock (financing activity)

Answer 3

Dr. Cash
Cr. Common Stock
Cr. Additional Paid-in Capital

Question 4

Payment of cash dividends (financing activity)

Answer 4

Dr. Dividends Payable
Cr. Cash

Question 5

Depreciation expense (non-cash transaction)

Answer 5

Dr. Depreciation Expense
Cr. Accumulated Depreciation

Question 6

Repayment of long-term debt (financing activity)

Answer 6

Dr. Bonds Payable
Dr. Interest expence
Cr. Cash

Question 7

Increase in accounts payable (operating activity)

Answer 7

Dr. Inventory (or Expenses)
Cr. Accounts Payable

Question 8

Sale of investments (investing activity)

Answer 8

Dr. Cash
Dr. Loss on Sale of Investments (if applicable)
Cr. Investments
Cr. Gain on Sale of Investments (if applicable)

Question 9

Amortization of bond premium (non-cash transaction)

Answer 9

Dr. Premium on Bonds Payable
Cr. Interest Expense

Question 10

Acquisition of a subsidiary (investing activity)

Answer 10

Dr. Various Assets
Dr. Goodwill
Cr. Various Liabilities
Cr. Cash